Unemployment rises months after a recession begins and falls months after it ends, so it is a:
ALagging indicator
BLeading indicator
CRandom indicator
DFixed indicator
Answer & Solution
Correct answer: A. Lagging indicator
1. It follows business activity rather than predicting it.
2. Unemployment is a lagging indicator.
3. Recovery in jobs was slow after 2009.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e, Chapter 7, Unemployment (CC BY 4.0)._
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